Bubble warnings are getting louder. American tech giants keep surging ahead of the market, with the Nasdaq Composite Index closing a fresh record. But Goldman Sachs has a soothing message.

Sure, tech stocks are worth a lot. At $US3.8 trillion, the combined value of Facebook, Amazon, Apple, Microsoft and Google's parent Alphabet tops the annual gross domestic product of Germany, and all the companies in Japan's Topix index of stocks.

But other aspects of their advance differ from bubbles past.

Unlike the rush to Nifty Fifty in the 1960s and dot-com frenzy in the late 1990s, the latest rally in the so-called FAAMG stocks has been built more on solid earnings and less on valuation expansion. Over the past decade, the cohort has seen 87 per cent of its share gains coming from profits and only 13 per cent from increases in price multiples. That compared with 73 per cent and 27 per cent, respectively for the rest of the market.

As a result, while tech occupies all top five spots in the market for the first time ever, the group's price-earnings ratio is relatively subdued. At 22.6 times earnings, the FAAMG block fetches a multiple that's less than half what the then-big five got in the internet bubble years, data compiled by Goldman Sachs showed.

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"Unlike the technology mania of the 1990s, most of this success can be explained by strong fundamentals, revenues and earnings rather than speculation about the future," strategists Peter Oppenheimer and Guillaume Jaisson wrote in a note. "Given that valuations in aggregate are not very stretched, we do not expect the dominant size and contribution of returns in stock markets to end any time soon."

Financial firms ruled the market from the 1800s to 1850s, followed by a six-decade reign by transport stocks as the US expanded its railroad system. Once steam and coal started powering a manufacturing boom, energy took over the market through the 1970s.

Since then, the rise of AT&T, IBM and Microsoft has helped elevate tech's status as the use of telephones and computers spread. But the industry's share in the market, even at its peak in 2000, is nowhere close to where other big sectors experienced in the past.

"Leading tech companies today have become very large in terms of market value, but that reflects the significant growth of technology spending and its ability to displace other more traditional capex spending," the strategists wrote. "Very often the new platforms become virtually the whole market."

Tech's dominance is far from over, they said, as more traditional industries such as retail and utilities are forced to embrace the internet and upgrade their equipment. At the same time, innovations such as artificial intelligence mean new areas of growth.

"This 'snow balling' effect is similar to what was experienced during the industrial revolution where one technology led to another and caused traditional industries to spend more on technology to survive," the strategists wrote.